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timing of tax refund and ch7 filing?

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    timing of tax refund and ch7 filing?

    Hi there,

    I've read some other posts about this topic, but none seemed to clearly answer my question.

    My wife filed alone on Jan 20 2009 for CH7. We live in Georgia. We just realized that we never thought about a tax refund for this year, and the attourney we hired never asked about this during our meetings.

    I'm not even sure if we'll be getting a refund yet (I owe a big chunk for self employment taxes). But lets say that we'd be getting a refund of 5k for the sake of arguement. What is our best strategy if we want to keep this? Here are the questions based on what I've ready so far:

    1. Would it be best to file now, get the refund, and spend it on legitimate and documented expenses (car expenses, living expenses, property taxes, etc) before the 341 meeting, scheduled for March?

    2. Would it be better to wait until after the 341 to file and then spend the refund?

    3. I know much of this depends on the trustee involved. Some folks indicated that their trustee asked about their tax status and wanted to seize their entire refund, and others said it never came up during the meeting. But I want to plan on worst case and take action in advance in possible...but not do anything illegal.

    Honestly, I don't feel it's "fair" that the court would have any claim on the return, as if we do get a return it would be on taxes that I paid (my wife had no income and no tax paid). Someone even suggested that we file our taxes separately, but I'm not sure I want to do that, and it give the appearance we're trying to pull a fast one in my opinion.

    Thanks so much for anyone's help...first time poster and hopefully a contributor soon.

    #2
    Does not matter when you file your taxes at this point. If the trustee has a claim on the refund, they can delay closing the bk and revoke the discharge if you don't turn it over.

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      #3
      OK...as you can imagine this was not what I wanted to hear, but I'm willing to accept losing half the refund, just so we can move on with our lives. If the trustee asks for it then can have it. Maybe we have unused exclusion to use against this...we'll check w/ the lawyer if it comes up. Anyone else have thoughts on this?

      So, with the knowledge now that it really doesn't matter when we file, can we reduce the amount they take by spending on "legitimate" expenses? Such as car repair, home property tax due, etc? Or is the full 1/2 gone, with no exceptions?

      Thanks!

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        #4
        Unless you can exempt it, the refund is the property of the bk estate. It's too late to try and do any offsets.

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